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…Assures of new era of investment
From Femi Folaranmi, Yenagoa
The Federal Government has tasked major Engineering, Procurement, and Construction (EPC) companies to return to Nigeria, assuring them that previous concerns have been addressed through bold reforms and investor-focused policy shifts.
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, who stated this while speaking at the EPC Deepwater Investment Roundtable organized by the Oil Producers Trade Section, OPTS, noted that the landscape of investment has changed and the country is open for business.
“When we say Nigeria is open for business, we’re not making a statement of intent; we’re pointing to the reforms we’ve implemented, the policies we’re enacting, and the partnerships we’re building. The landscape has changed, and this can be confirmed directly by the IOCs, who are members of the OPTS, who are already seeing the results,” he stated.
Lokpobiri, who acknowledged that many EPC firms had scaled down or exited Nigeria due to legitimate challenges in the past, such as contracting inefficiencies, regulatory ambiguity, security issues, and fiscal uncertainty, declared the bottlenecks have been addressed.
“But those reasons have been significantly addressed. Through the Petroleum Industry Act (PIA), we have streamlined fiscal terms, strengthened regulatory clarity, and committed to project security in partnership with our security agencies,” he added.
Lokpobiri seized the opportunity to appeal to International Oil Companies and deepwater operators to continue making Final Investment Decisions (FIDs).
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“The EPCs will not return if there are no projects. And there can be no projects if operators are not investing. I want to thank those who are already leveraging what the government is doing, but we must do more. The projects must flow for the EPCs to come back.”
Furthermore, the Minister reaffirmed Nigeria’s commitment to providing globally competitive incentives for deepwater operations.
According to him, the incentives under the PIA, include; reduced royalty rates for deep offshore production, ranging from 5% to 7.5% depending on water depth; cost recovery limits removed, allowing companies to recover full development costs before profit sharing; tax credits and allowances for frontier exploration; contract sanctity and investor protection mechanisms, ensuring long-term stability and streamlined approvals and shorter contracting cycles, now under active review to reduce delays.
Lokpobiri however, made it clear that these incentives will not be limited to the IOCs alone but will also extend to the EPC contractors who execute these technically demanding projects.
“These giant EPC companies, who once left, are exactly the kind of players who can thrive in deepwater. The same way we have fine-tuned incentives for operators, we will ensure those benefits are extended to EPCs, because without the EPCs, these projects cannot be delivered,” he declared.
